Telomeres, the physical ends of eukaryotic chromosomes, consist of tandem arrays of short DNA repeats and a large set of specialized proteins. A recent analysis has identified telomeric repeat-containing RNA (TERRA), a large non-coding RNA in animals and fungi, which forms an integral component of telomeric heterochromatin. TERRA transcription occurs at most or all chromosome ends and it is regulated by RNA surveillance factors and in response to changes in telomere length. TERRA functions that are emerging suggest important roles in the regulation of telomerase and in orchestrating chromatin remodelling throughout development and cellular differentiation. The accumulation of TERRA at telomeres can also interfere with telomere replication, leading to a sudden loss of telomere tracts. Such a phenotype can be observed upon impairment of the RNA surveillance machinery or in cells from ICF (Immunodeficiency, Centromeric region instability, Facial anomalies) patients, in which TERRA is upregulated because of DNA methylation defects in the subtelomeric region. Thus, TERRA may mediate several crucial functions at the telomeres, a region of the genome that had been considered to be transcriptionally silent.